Digital Trends

Time Warner plans to split AOL's Internet and advertising businesses into two separate entities...so either can by more easily sold.

In conjunction with releasing its financial results for its second fiscal quarter of 2008, Corporate giant Time Warner has said it plans to split AOL's Internet and advertising businesses, in a move that would make it easier for Time Warner to sell either unit, or enter into a merger involving only one part of AOL's current operations.

Once the top-flight symbol of "new media," the Time Warner/AOL merger didn't work out as well as the companies hoped, and now Time Warner is seeking to divest itself of all or part of its remaining AOL components as the company refocuses on creating content (like print media, television, and film) rather than distributing content—both its own and content from rival companies. In April, Timer Warner announced plans to separate itself from its cable business by the end of 2008.

"We've made the key decisions that will enable us to run AOL's access and audience businesses separately beginning in 2009," said Tim Warner CEO Jeff Bewkes in a statement. "As we continue to reshape Time Warner, we'll increasingly focus on our goal to create and manage high-quality branded content, across multiple platforms around the world, at the highest returns possible for our stockholders."

AOL has been converting itself from a walled-garden online service—which was once the most popular gateway to the Internet in the U.S.—to a series of free Internet-based services supported by advertising. AOL has also been developing its Platform A online advertising platform; also advertising revenue earned from AOL's own sites dropped during the quarter, it was offset by money Platform A was able to bring in from advertising on non-AOL sites.